Obamacare Notes

One big piece of news lately is that the CBO estimates that Obamacare could result in 2 million fewer jobs without improving health care coverage. Democrats are absolutely desperate here, trying to spin this as a good thing: hey, look, a bunch of people get more leisure time. That’s great, right? Econ story time: during the 1970s and 1980s, some New Classical economists seized on the rational expectations theory currently in vogue and ended up (long story and mathematics short) making the argument that recessions and depressions are due to real—that is, non-monetary—shocks to the economy. Thus started the Real Business Cycle theory. One of the results of this theory was that the effects of a business cycle were rational from the point of view of individuals operating in that economy. Keynesian opponents mocked adherents for RBC thinking that all of those unemployed people chose leisure as the best alternative rather than being able to support themselves with jobs. Well, congratulations, Keynesians: the tables have officially turned.